Despite Cuts to Higher Ed, Tuition Caps Unlikely This Session

By
Daniel Robison

Posted December 6, 2009

For the first time in state history, the Indiana Commission for Higher Education this summer recommended limits on tuition hikes for the state’s colleges and universities. The caps weren’t binding, but most schools set rates below the maximum suggested amounts.

Still, some legislators thought the increases were too high – especially during a recession -- and threatened to withhold state money. What followed was an ad hoc tug-of-war, with schools eventually reducing some costs outright or offering new incentive-based programs to decrease students’ financial burden if they get good grades.

Buoyed by their victory, some legislators are considering taking a more hands-on approach to setting tuition in the coming legislative session. But they may wait for what they see as a better time to address the issue.

In the current state budget, funding for higher education remained flat, but only with the help of tens of millions of federal stimulus dollars. But in early December, Governor Mitch Daniels, responding to 14 straight months of state revenues falling below forecasts, cut six percent over the next two years to higher education. That’s around $150 million bucks. And there’s no guarantee previous levels of state funding will be restored in the future, so university leaders are proceeding on the assumption it won’t.

So, in addition to cost-cutting before the 2009-2010 academic year, tuition also went up. But Daniels has said since tuition rates are already set for this year, the state’s most recent cuts won’t result in any immediate changes.

He says the legislature does not want to have to tell universities what to charge.

“But if the universities get out of line and don’t take into account what Hoosier families are going through, then we’d have to deal with that appropriately,” he said.

Indiana is one of just seven states that allow schools to set their own fee scales by a vote of the school’s Board of Trustees. But this past summer was different. Even though no school exceeded the non-binding tuition recommendations from the Commission for Higher Education, Senator

Luke Kenley of Noblesville, head of the State Budget Committee, threatened to withhold tens of millions of dollars in state funding for capital projects. That move puzzles Representative Matt Pierce of Bloomington, whose district includes Indiana University…

“The fact is, the university stayed within the recommendations of the state higher education commission. And that’s the way the system was set up. I don’t understand why Senator Kenley thought those tuition increases were so outrageous,” Pierce said. “I’d like nothing better than a zero tuition increase. But if that’s the goal of the General Assembly then we’re going to have to pony up the money. And we haven’t had the will or ability to do that the last several years.”

University officials say the increases are necessary in order to stay competitive. They do that by hiring star faculty, paying for employee health care increases and funding research.

But Higher Education Commissioner Teresa Lubbers, a former lawmaker, says that’s only one side of the argument.

“You can’t just say, ‘We need to have more money to hire more first class professors,’ on one hand. Or on the other hand, ‘We need to make college more affordable so we need to make sure college never increases at the rate of inflation.’ Too simplistic on the other standpoint,” she said.

Kenley’s pressure resulted in both IU and Purdue making changes, prompting the state budget committee to approve the money Kenley threatened to withhold. Pierce says letting the committee dictate university policy may have been the wrong move.

“When the universities essentially caved in they’re basically inviting this to happen repeatedly. And it will be up to Senator Kenley or whoever is running the budget committee in the future to decide if they want to use that leverage. But I personally think it’s a very bad precedent what happened last summer,” Pierce said.

Lubbers says the new system needs a chance to work despite last summer’s fireworks. and it can’t be judged on just one go-round. She says tuition caps legislation during this, a non-budget session, is unlikely.

“[But] anything is possible in the General Assembly,” she said.

Lubbers says some legislators may file bills calling for caps even if they think it’s a lost cause. But given the state’s bleak financial picture – missing revenue targets for the past 14 months – Lubbers says there’s a small possibility the legislature may reopen budget discussions. If payments are withheld from universities, trustees could raise tuition or fees to make up the difference.

Mike Delph says there’s just not enough time to appropriately address the issue during the short session. But he says the issue is not likely go away.